The Commodity Selection Index (CSI) is calculated as the product of Average Directional Movement Index Rating (ADXR) and the Average True Range multiplied by K coefficient proposed by Welles Wilder. The K coefficient takes into account Big Point Value (the profit obtained in case one contract goes up by one full point), initial margin requirements, and the commission to be paid.
The CSI study is is designed to define which commodities are suitable for short-term trading. The larger CSI value suggests the stronger trend and volatility characteristics.
||The big point value of a security.|
||The number of bars used to calculate the ADXR and the Average True Range.|
||The commission to be paid.|
||Initial margin requirements.|
||The type of moving average to be used in calculations: simple, exponential, weighted, Wilder's, or Hull.|
||The Commodity Selection Index.|
*For illustrative purposes only. Not a recommendation of a specific security or investment strategy.